Human immunodeficiency virus type 1 (HIV-1) encodes the transactivating protein Tat, which is essential for virus replication and progression of HIV disease. Tat has multiple domains and consequently the molecular mechanisms by which Tat regulates viral and cellular gene expression are complex. Tat stimulates human immunodeficiency virus type 1 (HIV-1) transcriptional elongation by recruitment of CTD kinases to the HIV-1 promoter. Using an immobilized DNA template assay, we have analysed the effect of Tat on kinase activity during the initiation and elongation phases of HIV-1 transcription. Our results demonstrate that CDK7 (TFIIH) and CDK9 (P-TEFb) both associate with the HIV-1 pre-initiation complex. Hyperphosphorylation of the RNAP II CTD in the HIV-1 pre-initiation complex, in the absence of Tat, takes place at CTD Serine 2 and Serine 5. Analysis of pre-initiation complexes formed in immunodepleted extracts suggest that CDK9 phosphorylates Serine 2 while CDK7 phosphorylates Serine 5. Remarkably, in the presence of Tat, the substrate specificity of CDK9 is altered such that the kinase phosphorylates both Serine 2 and Serine 5. Tat-induced CTD phosphorylation by CDK9 is strongly inhibited by low concentrations of 5,6-Dichloro-1-b-D-ribofuranosylbenzimidazole (DRB), a inhibitor of transcription elongation by RNAP II. Analysis of stalled transcription elongation complexes demonstrates that CDK7 is released from the transcription complex between +14 and +36, prior to the synthesis of TAR RNA. In contrast, CDK9 stays associated with the complex through +79. Analysis of CTD phosphorylation indicates a biphasic modification pattern, one in the pre-initiation complex and the other between +36 and +79. The second phase of CTD phosphorylation is Tat-dependent and TAR-dependent. These studies suggest that the ability of Tat to increase transcriptional elongation may be due to its ability to modify the substrate specificity of the CDK9 complex. CDK9 phosphorylation is required for high affinity binding of Tat/P-TEFb to the TAR RNA structure. We have recently shown that CDK9 phosphorylation is uniquely regulated in the HIV-1 preinitiation and elongation complexes. The presence of TFIIH in the HIV-1 preinitiation complex inhibits CDK9 phosphorylation. As TFIIH is released from the elongation complex between +14 and +36, CDK9 phosphorylation is observed. Consistent with these observations, we have demonstrated that purified TFIIH directly inhibits CDK9 autophosphorylation. Using recombinant TFIIH subcomplexes, our results suggest that the XPB subunit of TFIIH is responsible for this inhibition of CDK9 phosphorylation. Interestingly, our results further suggest that the phosphorylated form of CDK9 is the active kinase for RNAP II CTD phosphorylation. The HIV-1 Tat protein has been reported to transactivate several cellular genes including the potent chemotactic factor IL-8. Consistent with these in vitro assays, elevated levels of IL-8 protein are found in the serum of HIV-infected individuals. We now extend these observations by demonstrating that Tat induction of IL-8 is linked to the cell cycle. Cells that constitutively express the Tat (1-86) protein (eTat) and control cells (pCEP) were blocked at the G1/S border with hydroxyurea or thymidine block. The cells were subsequently released and IL-8 expression monitored by RNase protection and ELISA assays. RNase protection assays demonstrated that IL-8 mRNA expression is transiently induced, approximately four-fold, as the Tat-expressing cells enter S phase. Consistent with the RNase protection assay, an increase in IL-8 protein was observed in the cell supernatant using an IL-8 ELISA assay. Similar experiments were performed following a reversible block at the G2/M border with nocodazole and release into G1. Using the RNase protection and ELISA assays, little or no increase in IL-8 expression was observed during G1. Using gel shift as well as an immobilized DNA binding assay we demonstrate that the increase in IL-8 gene expression correlates with a specific increase in p65 NF-kB binding activity only in the nucleus of the Tat expressing cells. The CBP coactivator is present in the complex in the Tat cell line. Finally, we demonstrate that the presence of the proteosome inhibitor MG132 inhibits the induction of NF-kB binding, as well as IL-8 expression, supporting the role of NF-kB.